MoJ announces plans to scrap court fee refunds for settled cases

The Ministry of Justice last week unveiled plans to stop refunds of court fees for cases in the High Court and county court from next year. In a statutory instrument signed off by justice minister, Sir Oliver Heald, the MoJ removed the availability of refunds for cases where they have been settled or discontinued. The new statutory instrument – the Civil Proceedings Fees (Amendment) Order 2016, will come into effect from 6 March will apply to the fees payable prior to a trial for cases allocated to the small track, fast track and multi-track.

The statutory instrument will also amend the timescales in which fees are payable. Where notice of trial date or trial period is given by the court 36 days or more before the trial date or the Monday of the first week of the notified trial period, the court fee is payable at least 28 days prior to the trial date or the Monday of the first week of the notified trial period.

In an explanatory note attached to the statutory instrument, the Ministry of Justice stated that its aim was to make the legal process simpler and reduce the complexity of the current fee charging system by having fewer fee charging points. It also claimed that having common fees for similar processes across all jurisdictions was a fairer and more equitable policy:

‘The government’s overall aim is to reduce taxpayers’ subsidy of the court system by ensuring that fee income covers the cost of providing court services, minus the cost of the remissions system,’ it added.

Despite the justifications from the MoJ, the plan to end the repayment of court fees have received fierce criticism from lawyers, with some claiming it amounted to little more than a ‘hidden tax’ on litigants. Some critics within the legal sector claim the plans are both harmful and counter-productive; they believe that in introducing the measure the government is removing a key incentive to settle early, thus saving the court time and energy. Kerry Underwood, a solicitor at law firm Underwoods Solicitors, told the Law Society Gazette:

‘It is particularly inappropriate in the small claims track, where generally a losing party is not at risk of paying costs and where there are a high number of litigants in person and where anyone can represent a party and be paid for it. Parties may feel that they may as well have their day in court – nothing is lost.’

‘This is an ill-thought out measure which is no doubt seen as a way of earning extra money out of personal injury claimants when the small claims limit goes up to £5,000. It is notable that the small claims track is also where there has been a sharp increase in hearing fees, no doubt for the same reason. This move is wholly at odds with encouraging people to settle,’ he added.

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